SUMMER TRAININGPROJECT REPORT ON

WORKING CAPITAL MANAGEMENT

AT

BHARAT COKING COAL LTD.DHANBAD

BY – RAJ KISHOR VERMA ROLL. NO. 0911101037

BATCH- 2009-11MANGALMAY INSTITUTE OF MANAGEMENT STUDIES

PROJECT REPORT ON WORKING CAPITAL

MANAGEMENT

AT

BHARAT COKING COAL LTD.

Bharat coking coal ltd.

A subsidiary of coal india ltd.

NAVRATNA COMPANY

COMPANY PROFILE

Coal India Ltd, a schedule-“NAVRATNA” Public sector undertaking-The Single largest coal producing company in the world having more than 3.9 lakhs employees with the corporate Hqrs at Kolkata.

Bharat Coking Coal Limited (BCCL) is a Public Sector Undertaking engaged in mining of coal and allied activities.

It occupies an important place in as much as it produces bulk of the coking coal mined in the country. BCCL meets almost 50% of the total prime coking coal requirement of the integrated steel sector.

BCCL was incorporated in January, 1972 to operate coking coal mines (214 Nos) operating in the Jharia & Raniganj Coalfields, taken over by the Govt. of India on 16th Oct,1971 to ensure planned development of the scarce coking coal resources in the country.

Currently, the Company operates 81 coal mines which include 40 underground, 18 opencast & 23 mixed mines as on 01.04.2010.The Company also runs 6 coking coal washeries, 2 non-coking coal washeries.

The mines are grouped into 13 areas for administrative convenience. The total manpower as on 1.4.05 was 92,268 and as on 01.03.2010 is 72,222.

OBJECTIVE OF STUDY

1) Evaluate short term liquidity position of BCCL  2) Working capital efficiency of BCCL  3) To know the Debt collection period of BCCL  4) To evaluate profitability of the organization.  5) To evaluate solvency of the organization. 

SCOPE OF STUDY

We know the Working Capital is the main blood of the business. The scope of the project Working Capital for the period 2008-09, 2009-10 is to show the current liquidity position of the company. This project will help BCCL to

plan for future requirement of funds & maintain the financial sound position of the

company. How much to invest in Current Asset & maintain Current Liabilities to meet the

target of profitability.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

For Every Comprehensive research a proper research methodology is indispensable & it has to be properly conceived. There are two sources of data collection:

1. Primary Data 2. Secondary Data

The sources of data collected by me is Secondary Data.

The secondary data was obtained through the following means for the purpose of the project work.  - Annual reports of companies- Journals and Magazine.- Budgeted manuals- Audited balance sheet and profit and loss account.

Tools used for analysis of data:- Ratio Analysis- Settlement change in Working Capital

 

DATA ANALYSIS & INTERPRETATION

Working CapitalParticulars Year 2010 Year 2009 Rs.in lakhs Rs.in lakhs

A)Total Current Assets 257523.64 202567.67B)Total Current Liabilities 794790.34 834296.43

Working Capital (A-B) -537266.70 -631728.76

Current Ratio.

For the year:

= 0.32

= 0.24

2010 2009

CURRENT RATIO 0.320000000000004 0.24

0.025

0.075

0.125

0.175

0.225

0.275

0.325

CURRENT RATIO

Acid Test Ratio

= 0.205

= 0.158

2009-2010 2008-2009

ACID - TEST RATIO 0.205 0.158000000000001

0.025

0.075

0.125

0.175

0.225

ACID - TEST RATIO

DEBTORS TURN OVER RATIO

    

 = 11.14 days

   = 19.51 days

2009-2010 2008-2009

DEBTORS TURNOVER RATIO 11.14 19.51

1

3

5

7

9

11

13

15

17

19

DEBTORS TURNOVER RATIO

INVENTORY TURNOVER RATIO

= 5.29 times

= 6.17 times

2009-2010 2008-2009

INVENTORY TURNOVER RA-TIO

5.29 6.17

4.9

5.1

5.3

5.5

5.7

5.9

6.1

INVENTORY TURNOVER RATIO

DEBT COLLECTION PERIOD

= 32.76 days

= 18.70 days

2009-2010 2008-2009

DEBT COLLECTION PERIOD 32.76 18.7

2.5

7.5

12.5

17.5

22.5

27.5

32.5

DEBT COLLECTION PERIOD

SUGESTION & RECOMENDATION

1.The company must increase its Current Assets & decrease their Current Liabilities to overcome from Negative Working Capital.2.The plant must take certain steps to decrease the working capital cycle. One way can be better management of inventories.3. Debt collection Period Should be Faster. Because it increase the cash flow.4. Payment system of BCCL is fast. BCCL should make the payment system slower to maintain its cash Fund.5. BCCL can issue the shares to maximize his capital.6. BCCL should increase its Turnover to Overcome from Negative Working.

1.

7. Unskilled labour is more in BCCL & due to this BCCL has been paying a huge amount as a salary, so the BCCL should decrease its unskilled manpower.

CONCLUSION

CONCLUSION

- The major part of the analysis was to find out the impact of working capital policy on the return of the company.

- Working capital of BCCL is negative, so it doesn't show a good liquidity Position.

- Current ratio is not matching with the ideal ratio.

Thanks